Law Firm Starting Salaries Have Plunged 35 Percent Since 2009

Vivia Chen

July 12, 2012

I won't even try to be cute about this one: The latest stats from NALP (The Association for Legal Career Professionals) about the earning power of 2011 law grads are abysmal. If you're in law school, you should be alarmed. And if are thinking of going to law school, you should think twice.

The bottom line is that salaries for the class of 2011 dropped virtually across the board—but the decrease in the law firm sector is almost jaw-dropping.

First the general picture: NALP reports that the overall median starting salary for 2011 grads fell 5 percent from 2010, and nearly 17 percent just since 2009. We know the market has been shrinking, so no one should be shocked by these drops.

Now for the jolt: "The research also reveals that the median starting private practice salary fell over 18 percent from 2010 and since 2009 has fallen an astonishing 35 percent."

Let me say that louder: a 35 percent drop! What accounts for this precipitous decline? "Nearly all of the drop can be attributed to the continued erosion of private practice opportunities at the largest law firms," says NALP executive director James Leipold in the report.

In other words, far fewer grads are getting big-firm jobs with fat salaries. In fact, getting a Big Law job has become a long shot. Here's the new reality for the class of 2011:

1. Nearly 60 percent of law firm jobs were in firms of 50 or fewer lawyers.

2. Only 21 percent of grads got jobs in firms with more than 250 lawyers (two years ago, it was 33 percent).

3. The median law firm salary based on reported salaries was $85,000, compared with $104,000 the year before.

The NALP report also suggests the continuing growth of a subclass at big law firms:

Though still a tiny minority, salaries of less than $100,000 at large firms are more common than just a year ago, as more graduates are taking staff attorney or similar positions at lower salaries.

And the report highlights plenty of other indicators of a weakened legal market. Among them:

—Almost 12 percent of jobs overall were in the part-time sector, which were "especially prevalent in academic and public interest settings."

—Twice as many grads are going solo than in 2007 and 2008: "For 2011, 3 percent of all jobs, and 6 perccent of law firm jobs, were reported as solo practice."

—The number of grads working for a legal temp agency "ticked up dramatically in 2011, and is at its highest level since NALP began tracking this kind of job in 2006. About 2 percent of employed graduates were reported as working for a legal temp agency."

Frankly, I'm a bit surprised that only 2 percent are working for a legal temp agency. My suspicion is that some grads aren't even fortunate enough to get a job through that route.

It is startling to see that only 49.5 percent of employed graduates from the class found jobs in private practice and less than 57 percent of graduates for whom employment status was known were employed in a full-time job requiring bar passage that will last for more than one year.

Dismal indeed. I hope you aspiring law students are listening—and seriously weighing other career options.

Posted by Vivia Chen at 03:01:16 PM

Comments

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This article didn't say that BigLaw associate salaries have come down...because they haven't. It said that there are fewer jobs, hence the median salary for all grads is lower.

That's the thing before law firms cut the partners' profit they would cut the associates' (and the professional staff members') salaries first. I bet you the partners profit does not get cut. That's just how partners are - VERY GREEDY!

For you guys going solo right out of law school, one of the first things to do is hire a legal secretary or paralegal with a lot of experience and pay them commensurately. Trust me, that's an absolute necessity.

DCLawyer68--I don't think people's motivations are so one dimensional. In choosing a career, folks weigh a number of factors. I'd say the three key factors are level of interest, expected value of income stream that career will provide and a somewhat more amorphous weighing of work-life balance. For example (and I admit these are random examples), assume I am equally interested in being a teacher, being an attorney or starting an entrepreneurial company. Being a teacher, with its blocks of time off would, some would argue, provide a good work-life balance and would provide a fairly predictable income stream, but one lower than being a lawyer. Being a lawyer places more stress on the work-life balance, but comes with a higher and (historically) fairly secure income level. Being an entrepreneur, at least initially, is disruptive to work life balance and, while it may have a high upside in certain cases, because of its risk arguably offers a lower expected value than lawyering. So, applying this logic, many smart and hardworking (if risk adverse) people choose the law (and they are interested in the law--it is just not the only thing in the world they are interested in and there are factors besides interest level at play; if they were not interested in law, they could pursue another profession that provides a similar risk/reward and has barriers to entry similar to those of tier 1 law schools--dentistry comes to mind, although all the dentists I know seem to work 9-5 and take Fridays off, so maybe they've got us beat on work/life balance). Thus, if you remove financial security from the equation, lots of talented people will (whether consciously or not) go through the thought process I've described above and choose another field. This will mean that the law will lose a lot of really talented individuals to other fields, and our profession will suffer. And for those of you who say there are too many lawyers, I would argue that this change will disproportionately cause the individuals who have the ability to get into other well-paid and well-respected professions (e.g, the folks who can get into medical or dental schools, which have much higher admissions standards than all but tier 1 law schools) to flee our profession, meaning that some of our profession's top members may choose something else.

Hopefully this will (a) help young unemployed lawyers find jobs (b) help us back to a time and place when being a lawyer was something someone pursued for other than the $. It should also help reduce law school tuitions.

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About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: VChen@alm.com